Premier League Spending: Where Does The Money Go?

It has long been the general consensus that the big money in football (apart from the recent emergence of the Chinese Super League) is in the Premier League; however, despite the big amounts of cash on offer for teams in the Premier League, the teams in other countries are succeeding in European competitions. Here at TSZ we are asking the question, is the money going into the Premier League from the TV deals going out of the country and indirectly helping other countries, or is it staying in the Premier League or even flowing down into the English Football Leagues?

To establish this, we will look at all the teams in the Premier League over the last five years (which includes the current season) and see which leagues have received the money those teams have spent. We shall break this down further by season to see if there are any trends emerging.

First up, we will look back at the spending of each of the clubs in the Premier League over the last five years. All data has been obtained from www.transfermarkt.co.uk.

Over the last four full seasons and the latest transfer window, Manchester City top the charts – spending £587.14 million, just pipping their Manchester rivals into top spot. We can really see how much of a stamp new boss Pep Guardiola wants to put on his new side, spending a whopping £181.05 million in just his first transfer window in charge, which is greater than any sum of transfer windows in the past four seasons.

Next up, we will look at where all this money has gone; so effectively we shall be looking at which leagues have received the money spent by these Premier League teams. Has a majority of this money gone abroad? Or perhaps it has stayed in the Premier League or even filtered down into the English Football League system.

This investigation has shown that over the last four full seasons and the latest transfer window this season, Premier League clubs have spent a staggering £4,908,870,000; yes that is nearly 5 billion pounds! Of that huge amount of money spent, deals between Premier League clubs with £1,229,450,000 have seen the most amount of money spent, that is approximately 25% of the total spend that has stayed between the Premier League clubs. When we combine this figure with the amounts paid to Championship and Football Leagues 1 & 2 clubs, we can see that £1,718,280,000 has been kept in the English Football League system, which is 35% of the total spend.

When we look at which foreign leagues have received the greatest amount of money spent by Premier League clubs, we can see that La Liga in Spain receives the most, receiving £515,300,000 - 10.50% of the total spend. Therefore, we can put forward that the Spanish teams are the best foreign League to take advantage of the big money willing to be spent by the Premier League; effectively they are able to sell their players, benefit financially and then use this money to work the transfer market better to set themselves up for a good assault on the European competitions, highlighted by the fact they boast six finalists in the Champions League and five finalists in the Europa League in the last five seasons. On the other hand, when we look at Ligue 1 in France – who receive the third greatest amount of money – we can see that this has had little effect on progression in European competitions, with only PSG making some sort of headway in the Champions League.

One interesting note that this investigation has brought up is that Premier League clubs have spent more on Championship players than those in the German Bundesliga, Serie A in Italy, Eredivisie in Holland, Liga NOS in Portugal, Jupiler Pro League in Belgium, Premier Liga in both Russia and Ukraine, Serie A in Brazil and the Scottish Premiership.

Now we shall look at the breakdown per season of spending patterns of Premier League clubs; this will allow us to see if a given league is on an upward trend or downward trend in terms of money received by Premier League clubs.

Premier league spending patterns have remained steady and consistent when buying players in the last five seasons from fellow Premier League clubs, The Championship, Football Leagues 1 & 2, Eredivisie (Netherlands), Liga NOS (Portugal), Jupiler Pro League (Belgium), Premier Liga in Russia and Ukraine and the Scottish Premiership; whilst the percentage of total spend on players from Brazil has reduced in recent seasons after peaking due to the transfers of Paulinho to Tottenham and Oscar to Chelsea. The percentage of transfer money spent on players in Serie A (Italy) has remained consistent over the last five seasons and peaked during the latest transfer window, with the transfer of Paul Pogba to Manchester United a big factor. Spending of money on players in Ligue 1 in France has been largely inconsistent; in 2012/13 and 2015/16 they received the second highest percentage of total transfers, with the transfers of Hazard, Lloris, Giroud and Remy in 2012/13 and Martial in 2015/2016 contributing factors to the fluctuating numbers.

The total value of transfers of players from La Liga (Spain) to the Premier League increased in season 2013/14 before peaking in 2014/15, whilst the percentages of total spend has dropped off in recent seasons. In recent times, the German Bundesliga is the league on an upward trend, with Premier League clubs spending a higher percentage of their total transfer fees on players from Germany; in the last season and the transfer window just passed, Premier League clubs spent 15% of their total spend in 2015/2016 and 13.43% in the summer 2016 window, compared to a low of 1.16% in 2014/2015.

To conclude, this investigation has established that 35% of total transfer fees spent by Premier League clubs over the last five seasons (including the latest transfer window) have remained in the English Football League system. La Liga of Spain and Ligue 1 of France have been the greatest beneficiaries of the transfer fees paid by Premier League clubs, whilst of late there has been an increase in percentage of the total spend on players from the German Bundesliga. With 35% of all the money spent by Premier League clubs remaining in the English Football system, it would be interesting to see how this figure compares to the other countries across Europe….